I agree that you probably should not buy a home unless you can reasonably afford the payments (P&I, taxes, and insurance) on a 30yr fixed mortgage, but I don’t believe the 20% down is completely necessary.

I’ve owned two homes so far, and could barely scrape together enough for 5% down pmt. In both cases, I sold at a fair gain. In both cases, I ended up financially better off with purchasing rather than renting.

Obviously, the 20% down helps you if you plan to sell in the next few years, and you’re concerned about declining prices, so the initial equity you paid for will cushion that a bit.

But for some of us who are trying to raise a young family, saving is difficult. If I waited until I had 20% down, I’d probably never purchase a home.